Company feasts on a protein to defy the one-dollar blitz

The A2 team ... the Premier, Barry O'Farrell, is shown around A2 Corporation's new $15 million processing plant near Camden before enjoying a glass of what the company has to offer.

PROFITING from the milk wars, A2 Corporation yesterday opened a high-tech $15 million processing plant near Camden, south-west of Sydney, to meet growing demand for its dairy products which, the company claims, can aid digestion.

The A2 brand refers to the A2 beta-casein protein found in the milk of dairy cows identified by genetic tests and milked separately.

A2 claims to be the fastest-growing dairy milk in Australia. Sales have risen 800 per cent since it started out in 2007 and there has been no discounting in response to the launch of $1 per litre milk prices by Coles in January last year.

At yesterday's opening of the 60 million litres per annum facility in Smeaton Grange, the chief executive, Geoffrey Babidge, said A2's growth was ''all about the protein in the milk''.

''Originally all cows used to produce milk with only the A2-type beta casein protein, whereas over many thousands of years there was a change in how dairy cows in Western herds produced milk,'' he said.

''So dairy herds now comprise cows that produce milk with only the A2 protein but also cows that only produce milk with other proteins in them - in particular the A1 protein.''

A Dairy Australia dietitian, Glenys Zucco, said A2 milk, like all other cows milk, contained 10 essential nutrients, ''but there's no convincing scientific evidence to suggest that A2 has any advantage over regular milk''.

''That said, there's certainly lots of consumer feedback that they enjoy the milk and we'd certainly encourage them to continue to have it if that's what they prefer,'' Ms Zucco said.

Michael Perich, who runs the dairy at one of A2's main suppliers, the Leppington Pastoral Company, said cows genetically produced either A1 or A2 protein.

Leppington, which milks 2000 cows on almost 5000 acres in Bringelly, owns about a quarter of A2 Corporation and for the past six years has deliberately bred cows with just A2 genetics, Mr Perich said.

When the herd was first tested six years ago, only a third were A2 cows, but that proportion is now 60 per cent and the latest calves are 75 per cent A2.

''We sign a contract that the cows that are tested as A2 can only be sold as A2 milk through A2 Corporation,'' he said.

''We can sell the milk to anyone we like, but we can't sell it as A2 milk. It might happen to be A2 but we can't brand it that way and we can't tell anyone that it doesn't contain A1 protein. It is A2 Corporation's IP [intellectual property] and it's quite a strong IP.''

Mr Perich said discounting wars in which milk was sold for $1 had had an unexpected effect.

''One-dollar milk is destroying the dairy industry in Australia,'' he said.

''But when you've got brands like A2 … that consumers support, and there's a difference, [the brands are] thriving … The price wars have actually helped that because consumers have seen the point of difference.''